Companies Act 2013 with amendment - Board of Directors, Meetings of board and Shareholder meetings

4. Subsribers to
memorandum
- First Director [Sec 152]
Member
- Every director other than first
director to be appointed in General
Meeting
Board of
Directors
- Alternate Director
- Additional Director
- Casual Vacancy
Third Parties
- Central Government
- Tribunal
- Proportional representation

6. Appointment of the new directors other than retiring directors in public company
02
03
If a person were to be appointed as a director , he should
be an eligible person to hold the office as the director
Such intention of the person is to be made known to the
company by serving a notice at least 14 days before the
meeting
01
A notice is to served along with deposit of Rs.100000 or
such higher amount as may be prescribed which shall be
refunded , is to be made by such person or by the member
who proposes him as the director.
Company shall inform all the members at least seven
days before the meeting about this candidature04

7. 06
07
It shall be informed to all the members individually by
sending a notice or by giving advertisement in at least two
newspapers, circulated in the place where the registered
office of the company is located
If such person , who served the notice to become the
director, is elected as director or obtained 25% favourable
votes , the amount deposited by him will be refunded to him
05
If he is not elected as director , then the amount
deposited by him will be forfeited by the company
.
Every person whose name is proposed as the candidate for
the office of a director shall sign and file with company his
consent in writing to act as a director , if appointed.
08
Likewise as person who for the first time has been appointed
as a director has also to file such consent in writing to the
registrar within 30 days from the date of his appointment
09

10. Minimum Directors :
a) Public Company – 3
b) Private Company – 2
c) One person – 1
Maximum Directors in a Company : 15 [NA to Sec 8 Co]
More than 15 through special resolution
Maximum Directorships held by a person [Sec 165]: 20
[including alternate directors, maximum limit for public company :10]
Penalty of Rs 5000 per day and disqualified u/s 164 in ALL companies of directorship

11. TYPE DESCRIPTION
ADDITIONAL DIRECTOR HOLD OFFICE UPTO AGM
ALTERNATE DIRECTOR ABSENCE FROM INDIA FOR NOT LESS THAN 3 MONTHS
NOMINEE DIRECTOR NOMINATED BY INSTITUTION
SMALL SHAREHOLDERS
DIRECTOR [151]
LISTED COMPANY : 1000 SHAREHOLDERS/ 1/10TH OF
MEMBERS whichever is lower
Maximum 2 Companies
WOMEN DIRECTOR a) LISTED COMPANY &
b) PUBLIC COMPANY
Paid up capital > Rs 100 crores, or
Turnover > Rs 300 crores
INDEPENDENT DIRECTOR a) LISTED COMPANY
b) PUBLIC COMPANY
Paid up capital > Rs 10 crores, or
Turnover > Rs 100 crores, or
Loans/debentures/deposits > 50 crores
ROTATIONAL DIRECTOR PUBLIC COMPANY :
2/3 Liable to retire of which 1/3 will retire

12. Every Listed company shall have at least 1/3 of the total number of directors as
independent directors
An independent director in relation to a company means a director other than
managing directors or a whole-time director or a nominee
According to Section 152
who, in the opinion of the board ,
is a person of integrity and
possesses relevant expertise and
experience.
who is not a promoter of the
company or its holding, subsidiary
or associate company
;
promoters or directors in
who is not related to the
the
company, its holding,
subsidiary or associate company
who has or had no pecuniary
relation or transaction with
the company

13. Act
2013
Act
1956
Act
2013
Act
1956
Members and HUF Y Y Husband and wife Y Y
Father (including step-
father)
Y Y Mother (including step-
mother)
Y Y
Father’s father N Y Mother’s father N Y
Father’s mother N Y Mother’s mother N Y
Son (including step-son) Y Y Daughter (NOT MENTIONED
including step-daughter)
Y Y
Son’s wife Y Y Daughter’s husband Y Y
Son's son/ daughter N Y Daughter’s son daughter N Y
Son’s son’s wife N Y Daughter’s son’s wife N Y
Son’s daughter’s husband N Y Daughter’s daughter’s
husband
N Y
Brother Y Y Sister Y Y

15. (1) Independent judgment to
bear on the Board’s
deliberations especially on
issues of strategy, performance,
risk management, resources,
key appointments and
standards of conduct
(2) bring an objective
view in the evaluation of
the performance of board
and management
(3) scrutinise the
performance of
management in meeting
agreed goals & monitor the
reporting of performance
(4) satisfy themselves on the
integrity of financial
information and that
financial controls and the
systems of risk management
are robust and defensible
(5) safeguard the
interests of all
stakeholders, particularly
the minority shareholders
(6) balance the conflicting
interest of the
stakeholders
(7) determine remuneration of
executive directors, KMP &
senior management. Prime role
in appointing and recommend
removal of executive directors,
KMP & senior management;
(8) moderate and
arbitrate in the interest of
the company as a whole,
in situations of conflict
between management and
shareholder’s.

17. Chairperson Independent Director
Non executive director 1/3 of board
Executive director/ NA 1/2 of board

18. Not Eligible for Appointment
- Unsound mind, Undischarged insolvent, not
paid calls in respect of shares held
- Order disqualifying him for appointment
passed by tribunal or court
- Convicted of an offence dealing with related
party transaction at any time during preceding
5 years
- Convicted to court for any moral offence and
sentenced thereof for not less than 6 months &
5 years has not elapsed since
-Convicted & sentenced for 7 years or more
Not Eligible for Re Appointment – Automatic
Vacation & Pvt Co applicable
[5 years from date on default]
•- Not filed financial statements or annual
returns for any continuous period of three
financials years
•- Failed to repay the deposits accepted or pay
interest or redeem debentures on due date or
pay dividend declared and such failure
continues for 1 year or more
•- Articles of association may provide
additional grounds for disqualification

19. In accordance with AOA
In good faith to promote objectives of the company
Exercise duty with reasonable care, skill, diligence
Not involve in situations which may conflict with interest of the company
Not achieve any undue gain or advantage [fine equal to gain Delhi HC]
Not to assign office
If the above is contravened director shall be punishable with fine of Rs 1,00,000 which may extend to Rs 5,00,000

20. Only through board meeting
Calls on shares
Authorise buy back
Issue shares and securities in/os India
Borrow monies
Investing the funds
Grant loans/ guarantee
Approve financial statements & Boards report
Diversification & Take over
Political contributions
Appointing or removing KMP
Appointing internal & secretarial auditors
Restrictions on Power of Board
Only with consent of members by special
resolution
To sell , lease or otherwise dispose entity
[20%]
To invest other than in trust securities amount
received as a result of merger
Borrow money [> paid up + reserves]
Remit or give time for repayment of debt

22. 2/3rd of Directors of Public Company are liable to retire
Of which 1/3rd will retire at every AGM
Retirement by those who are longest in office
If same period of time in office as agreed between directors
• Adjourned to same day next week unless its national holiday then next day
• If at adjourned meeting vacancy not filled up then retiring director deemed
reappointed unless
• Resolution for re appointment put and lost
• Retiring director notice to company on unwillingness
• Disqualified for appointment
• Special or ordinary resolution required for re appointment
In case of vacancy on board due to retirement
Not counted in 2/3 : Nominee, Independent,Tribunal, Small
shareholder, additional, casual vacancy
Not retire : Executive director [MD,WTD]

24. • Either in person/ video conference/ other audio visual means
First Meeting : 30 days from date of incorporation
• One Person, Small, Dormant, Private Company Startup [DIPP]:
• Atleast 1 meeting in each half of the calendar year [Sec 8 Company if no default in filing financial
statement]
• 90 days minimum gap between meetings
• Other Companies :
• Atleast 4 meetings in a calendar year
• 120 days maximum gap between meetings
Subsequent Meetings :
Adjournment in case of Quorum same day next week

30. Minutes in physical
or electronic form
Prepared by
Chairman
Summary of
proceedings
To be entered
within 30 days of
meeting
Signed by
Chairman
Circulated to all
directors within 15
days
Once signed can be
altered only with
Board approval

31. Every officer of the Company whose duty is to give notice under this
provisions and who fails to do so shall be liable to a penalty of
Rs.25, 000.
If any default is made in complying with the provisions of the act In
respect of Board Meeting, the Company shall be liable to a penalty of
Rs.25, 000 and every officer of the company who is in default shall be
liable to a penalty of Rs.5, 000.
If a person is found guilty of tampering the minutes of the proceedings
of the meeting, he shall be punishable with imprisonment for a term
which may exceed to 2 years and with fine which shall not be less than
Rs.25, 000 but which may extend to Rs.1, 00,000.
If a director of the Company contravenes the provisions of Disclosure
of Interest by director then he shall be punishable with imprisonment
for a term may extend 1 year or fine which shall not be less than Rs.50,
000 but may extend to Rs.1, 00,000 or both.

32. ANNUAL GENERAL
MEETING
EXTRA ORDINARY
GENERAL MEETING
OTHER MEETINGS
POSTAL BALLOT
CREDITORS
CLASS OF MEMBERS
COURT CONVENED
MEETING

34. Members personally
present
Total members on
date of meeting
5 <1000
15 1000-5000
30 >5000

36. • Financial statement
• Dividend declaration
• Director appointment
• Auditor Appointment & Remuneration
Ordinary Business :
• Every other matter other than ordinary business
Special Business :
• Business of Company taken over by Government
• Company did not function
• Accounts of company are not ready
AGM is Compulsory :
• Copy of annual report
• Material facts of each item of special business
• Shorter notice if agreed by 95% of members entitled to vote
Notice sent atleast 21 days prior to meeting with the following [Sec 101] : Member, Auditor, Director

38. Extra Ordinary :
Any meeting between 2 AGM’s.
• Board / Members can call for the EGM
• Memebr 1/10 voting requisition
• Urgent matters
• Notice as AGM
• Can be held anywhere in India
Postal Ballot : Matters that can be
undertaken
Alteration of MOA/AOA
Buy Back of shares
Sale of undertaking
Shifting registered office outside
city/village
Issue of shares with differential rights
Change in purpose for which funds
unutilised as raised from public
Court Convened Meeting : NCLT

39. Call for an EGM
Appoint Proxy [Sec 105] :
• Submitted atleast 48 hours before meeting
• No right to speak or clarification
• Eligible for poll voting
• Can demand poll 10% voting/ Rs 5 lakh face value
• Single proxy represent max50 shareholders
• Defective proxy form can invalidate resolution passed
• Can be revoked by shareholder anytime
Request for inclusion of agenda items
• Requisition before 6 weeks deposited at registered office
• Deposit reasonable amount for company to meet expense for the request
Seek Appointment as Director
• Propose self/ other person
• 14 days prior to meeting with Rs 1 lakh deposit
• Company to inform other shareholders 7 days prior

40. Ask questions during meetingAsk
Elect Small shareholder director :
• Listed Company
• 1000 small shareholders or 1/10th of small shareholders
[face value <20,000Rs[
Elect
Access to Company documents
• Can take copies/ extract
• Documents include Registers, MOA,AOA, Minutes
Access
Approach stakeholder relationship committee with
grievance
Approach

41. Restriction : No voting in
respect of any shares
registerd on which calls not
paid
Show of hands : Unless poll
demanded, by show of hands
followed by declaration by
chairman
Postal Ballot:
Any business other than
ordinary business &
Any business in respect of
which directors and
auditors have right to be
heard
Postal ballot assented by
majority of shareholders
Demand for Poll :
By Chairman on his own
motion
Members holding shares in
aggregate of more than Rs 5
lakh in face value or 10%
voting rights
Chairman has power to
regulate poll
Result of poll shall deemed
to be the resolution passed